Indian Navy plans to lease certain assets
Introduction of leasing model in the Defence Acquisition Procedure (DAP 2020) is a path breaking procedural change and provides the option to reduce short-term capability gaps considering the long gestation period of shipbuilding contracts, said the Vice Admiral G Ashok Kumar, Vice Chief of Naval Staff.
Addressing the eSymposium on ‘Leveraging Leasing For Force Level Maintenance & Modernization’ on 18 Nov 2020, he said the Indian Navy is planning to lease certain assets in the medium-term to mitigate critical operational capabilities gap.
“For the Indian Navy, we will look towards leasing operational support assets and auxiliaries to enhance our operational capabilities and avoid huge investments in manning and maintaining them.”
The Indian Navy may also look at operational enablers like utility helicopters and unmanned solutions for operational preparedness of the Navy, said the Vice Admiral at the eSymposium organized by FICCI in association with SAMDeS as Knowledge Partner.
Vice Admiral Kumar stated that “our future requirements also include capabilities such as space-based surveillance, robust communication networks integrated with AI, modern aircraft, etc.”
“Capability building is a long term and evolving process that includes industrial capability, management of technology and budget for modernization,” he said.
“We are also continuously working to identify and mitigate the capability gaps through innovative methods and one such option can be the leasing of assets.
“To meet the emerging challenges and responsibilities, there is a wide range of operational capabilities envisaged,” he noted.
Elaborating on the merits of leasing model, Vice Admiral Kumar said that it enables further focus on core competence, removes technological complexities, lowers manpower cost for maintenance thereby reducing the overall cost for acquiring an asset.
Highlighting the opportunity in leasing, he urged the industry to have and maintain a long-term outlook in this sector. “If the requirements of the three services can be met through leasing provisions, it would be a win-win situation for the Indian industry and the armed forces,” said Vice Admiral Kumar.
The on-going modernization process, he said, aims to create capabilities to accomplish a range of missions. A wide variety of such capabilities can now be covered through the provision of leasing and Indian industry can play an important role in meeting these requirements, he said.
The addition of leasing as a new chapter in the Defence Acquisition Procedure is a welcome step, according to Gargi Kaul, Former Secretary Defence Finance.
She further added that though leasing in India is still low and there is a need to further modify the existing rules in the DAP.
The Defence Acquisition Procedure will ensure a smooth transition through the interim mechanism of leasing, added Admiral R K Dhowan (Retd.), Former Chief of Naval Staff; Chairperson, Society for Aerospace, Maritime and Defence Studies (SAMDeS).
“We should aim for capacity building and capability enhancement of our armed forces, to increase operational efficiency through leasing,” stressed the Admiral.
There are many countries which have their own leasing models and India should also develop its own model, according to S P Shukla, Chairman, FICCI Defence and Aerospace Committee and Group President (Defence, Aero, Agri and Steel); Member of the Group Executive Board, Mahindra Group. #banking #leasing #manufacturing #makeinIndia /fiinews.com
